Category Archives: Social Security

Treasury Releases First in Series of Papers on Social Security Reform

Source: U.S. Treasury, September 24, 2007

The Treasury released today the first in a series of issue briefs that will discuss Social Security reform, focusing on the nature of the problem and those aspects of reform that have broad support.
Paulson Statement on Social Security Reform, September 24, 2007
Issue Brief No. 1 Social Security Reform: The Nature of the Problem, September 24, 2007

Reasons Social Security Privatization Particularly Harms Women

Source: National Partnership for Women and Families

Social Security was established nearly 70 years ago to provide a critical safety net to protect our most vulnerable citizens. Now, citing a fictitious “crisis,” President Bush wants to overhaul Social Security and change the way benefits are calculated and distributed, including having workers invest part of their contributions into private accounts. These proposals will severely undermine the Social Security safety net and disproportionately harm women and minorities. Social Security – the guaranteed foundation for most seniors’ retirement – must be strengthened, not whittled away.

The Social Security reform plan that President Bush is promoting would exacerbate those problems by diverting one-third of a worker’s Social Security contributions to private accounts. The result would be lower guaranteed benefits for ALL future retirees, regardless of whether they open individual private accounts. Lower benefits would cause great harm to women, who are much more likely than men to depend on Social Security’s guaranteed benefits to avoid poverty.

See also:
National Partnership for Women and Families: Social Security Page

Recent/Updated CRS Reports: Health Insurance, Medicare and Social Security

Source: Congressional Research Service (via OpenCRS)

American taxpayers spend nearly $100 million a year to fund the Congressional Research Service, a “think tank” that provides reports to members of Congress on a variety of topics relevant to current political events. Yet, these reports are not made available to the public in a way that they can be easily obtained. A project of the Center for Democracy & Technology, Open CRS provides citizens access to CRS Reports that are already in the public domain and encourages Congress to provide public access to all CRS Reports.
Integrating Medicare and Medicaid Services Through Managed Care
Medicare Prescription Drug Benefit: Low-Income Provisions
Primer on Disability Benefits: Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI)
Social Security Administration: Administrative Budget Issues
Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI): Proposed Changes to the Disability Determination and Appeals Processes
Supplemental Security Income (SSI): Accounts Not Counted As Resources
Tax Benefits for Health Insurance and Expenses: Overview of Current Law and Legislation

How Much Do Americans Depend on Social Security?

Source: Laurence J. Kotlikoff, Ben Marx, and Pietro Rizza, National Center for Policy Analysis, NCPA Policy Report No. 301, August 2007

From Policy Digest:
Even the wealthy depend upon Social Security for much of their consumption after they quit working, according to a new report from the National Center for Policy Analysis (NCPA).
Consider:
• Social Security accounts for virtually all of the discretionary consumption of households with preretirement incomes of less than $50,000 a year or $25,000 for singles.
• Social Security accounts for about one-third of all discretionary consumption for the highest-income households — couples earning $500,000 or singles earning $250,000 prior to retirement.

A primary goal of financial planning is to maintain a consistent standard of living during a person’s lifetime. If Social Security were abolished tomorrow, all retirees would experience an immediate reduction in their consumption. If younger workers were notified in advance, they could adjust their saving and spending habits today to avoid abrupt changes in their standard of living upon retirement. Yet only the highest income workers have the ability to adjust so as to completely smooth their consumption across their lifetime. Because low- and middle-income workers are constrained by current obligations they cannot completely adjust.

Issue Brief: Women and Social Security

Source: American Academy of Actuaries, Issue Brief, June 2007

From the press release:
Gender-related differences in the American work culture have resulted in lower Social Security benefits for women, the American Academy of Actuaries Social Insurance Committee said in a new issue brief, “Women and Social Security.” The actuaries cite differences in wage histories, greater probabilities of outliving a spouse and being single in retirement, and the greater likelihood for women to be temporarily out of the workforce, among the differences that cause their benefits to be smaller even though calculated using gender-neutral rules.

The Academy’s issue brief also determines that women, who on average are more likely to have insufficient income in retirement, are in turn more dependent on Social Security. In fact more than 40 percent of females aged 62 or older rely on Social Security for more than 90 percent of their income, as opposed to 28 percent for males aged 62 or older. Additionally poverty rates for single women aged 65 or older are among the highest of any subgroup in the United States.

Social Security: The Chilean Approach to Retirement

Source: Christopher Tamborini, Congressional Research Service, Order Code RL34006, May 17, 2007

Over the past few years, there has been intense debate about Social Security reform in the United States. A number of options, ranging from changing the benefit formula to adding individual accounts, has been discussed. The policy debate takes place against the backdrop of an aging population, rising longevity, and relatively low fertility rates, which pose long-range financial challenges to the Social Security system. According to the 2007 Social Security Trustees Report’s intermediate assumptions, the Social Security trust funds are projected to experience cash-flow deficits in 2017 and to become exhausted in 2041.

As policymakers consider how to address Social Security’s financing challenges, efforts of Social Security reform across the world have gained attention. One of the most oft-cited international cases of reform is Chile. Chile initiated sweeping retirement reforms in 1981 that replaced a state-run, pay-as-you-go defined benefit retirement system with a private, mandatory system of individual retirement accounts where benefits are dependent on the account balance. As a pioneer of individual retirement accounts, Chile has become a case study of pension reform around the world. Although Chile’s experience is not directly comparable to the situation in the United States because of large differences between the countries, knowledge of the case may be useful for American policymakers.